TOKYO: Crisis-hit Toshiba's woes deepened on Tuesday when Moody's and Standard & Poor's cut its credit rating to junk, casting doubt on a turnaround plan unveiled in response to an embarrassing profit-padding scandal.
On Monday Toshiba rolled out a wide-ranging restructuring which included thousands of job cuts, as it warned it would book a record $4.5 billion annual loss. Investors dumped its Tokyo-listed shares, which have plummeted by nearly one quarter in the last two days of trading.
Moody's said its two notch-downgrade to Ba2 was in response to Toshiba's overhaul and its weak prospects, and warned of more possible cuts. "The announcement indicated that earnings and cash flow generation will be significantly below our previous expectations," said Moody's analyst Masako Kuwahara. She added that "our expectation of improvement in earnings, if any, for each business segment will be very gradual even after the restructuring".
S&P, meanwhile, announced a one-notch cut to BB+, saying in a release that Toshiba's "operating performance and financial standing may deteriorate further" in the current fiscal year.
A company-hired panel earlier this year found executives at one of Japan's best-known companies had systematically pressured underlings to inflate profits to hide poor results. The case forced Toshiba's incumbent president and seven other top executives to resign. The company has admitted it had inflated profits by about $1.2 billion since the 2008 global financial crisis.
Toshiba's business was dented by the global downturn, while the 2011 Fukushima disaster killed off demand for atomic power at home in a big blow to the firm's key nuclear division. The company's shares have lost more than half their value since worries about its financial statements cropped up earlier this spring.
Among the planned job cuts announced Monday are 6,800 positions in Toshiba's lifestyle division - which makes consumer electronics and home appliances - and about 1,000 jobs at its corporate headquarters. The company, which has about 200,000 employees globally, earlier said it would cut 2,800 jobs from its memory chip division. It is also stopping production of televisions overseas.
I-Net Bridge For more than two decades, I-Net Bridge has been one of South Africa’s preferred electronic providers of innovative solutions, data of the highest calibre, reliable platforms and excellent supporting systems. Our products include workstations, web applications and data feeds packaged with in-depth news and powerful analytical tools empowering clients to make meaningful decisions.
We pride ourselves on our wide variety of in-house skills, encompassing multiple platforms and applications. These skills enable us to not only function as a first class facility, but also design, implement and support all our client needs at a level that confirms I-Net Bridge a leader in its field. Go to: http://www.inet.co.za
LEGAL DISCLAIMER: This Message Board accepts no liability of legal consequences that arise from the Message Boards (e.g. defamation, slander, or other such crimes). All posted messages are the sole property of their respective authors. The maintainer does retain the right to remove any message posts for whatever reasons. People that post messages to this forum are not to libel/slander nor in any other way depict a company, entity, individual(s), or service in a false light; should they do so, the legal consequences are theirs alone. Bizcommunity.com will disclose authors' IP addresses to authorities if compelled to do so by a court of law.